You mix up excitement with emotion my man. As you mix BLOOMBERGs size with professionalism.
It is a fast-growing, lucrative business, but the intense pressure to be first is not without cost. In August, Bloomberg committed a spectacular blunder, falling for a fake press release and publishing a story that caused shares in Emulex, a California communications equipment company, to plunge 55 points in minutes.
The release, which came over Internet Wire, a service that distributes company news, claimed in suspiciously vague terms that Emulex's chief executive had resigned and the company would restate its earnings. Bloomberg reported the release as fact, even though it was unable to confirm with Emulex that the news was real.
The hoax was quickly discovered, and Emulex stock regained its value within hours. Federal prosecutors have charged Mark S. Jakob, a 23-year-old California man, with securities fraud for the hoax. But Emulex investors who panicked and sold their shares as the stock plunged are unlikely to recover their losses. One angry investor has now sued Bloomberg and Internet Wire, claiming he lost $15,000 as a result of their recklessness.
Still, Bloomberg will continue to use information from PR Newswire and Business Wire, the leading press release wires, as well as Internet Wire, without verifying its authenticity in most cases, Winkler said. Financial news services and other media organizations get press releases 15 minutes before they are distributed to the general public, fueling a furious competition among the news services to rewrite them for their subscribers during their window of exclusivity.
Given the sheer crush of news releases, wire services do not generally verify their authenticity, a task impossible under current competitive pressures. Traders watch for news intently and react almost instantaneously to news, creating intense pressure on the financial wires to be first with headlines and stories. To keep up, Bloomberg has a team of seven people at its Princeton, N.J., bureau who monitor press release wires full-time.
AI
